Innovation efficiency and firm performance in a benchmarking context

This paper examines the effect of innovation efficiency on firm performance using the Greek version of the Community Innovation Survey (CIS) 2012–2014 and employs a dataset of 1,274 innovative manufacturing firms. Introducing a data envelopment analysis (DEA)-type benchmarking strategy with non-continuous knowledge inputs, the main findings suggest that innovation efficiency, although does not exert a direct impact on firm performance, moderates the relationship between the internally generated knowledge and firm performance. On the other hand, such a moderation relationship is not confirmed for the relationship between external knowledge and innovation spillovers on firm's performance. Although the impact of the embodied to innovation inputs spillovers, on firm performance, is always positive and significant, empirical results indicate that absorptive capacity exhibits diminishing returns with respect to performance.